Nonlinearity, Chaos Theory and the DJIA by Victor E. Krynicki, Ph.D.
ARTICLE SYNOPSIS ...Nonlinearity, Chaos Theory and the DJIA by Victor E. Krynicki, Ph.D.
Here's a fresh look on using nonlinear systems and chaos theory to understand the markets.
Concepts deriving from nonlinear systems and chaos theory have begun to be applied to understand
stock market behavior. In a STOCKS & COMMODITIES article, Hans Hannula presented an attempt to apply
the concept of the strange attractor to major price swings, pointing out that stock market behavior evinces
both linear and nonlinear domains.
Within a linear domain of the stock market, a proportional relationship controls price moves, si...